EUR/JPY Price Analysis: Formation of a symmetrical triangle conveys volatility contraction

The EUR/JPY pair has sensed a buying interest after a gradual correction to near 144.20 in the early Asian session. The cross remained lackluster on Monday despite rising bets for an interest rate hike by the European Central Bank (ECB) ahead.

Higher oil prices after the announcement of production cuts from OPEC+ have fueled inflation expectations in Eurozone. This might force ECB President Christine Lagarde to continue its rate-hiking spell to keep weighing on inflationary pressures.

Meanwhile, the Japanese Yen managed to keep its feet firmer despite a solid rally in the oil price. It is worth noting that Japan is one of the leading importers of oil in the world and higher oil prices generally hurt the Japanese Yen.

On an hourly scale, EUR/JPY is auctioning in a Symmetrical Triangle chart pattern that indicates a sheer volatility contraction and conveys an absence of a potential trigger. The downward-sloping trendline of the chart pattern is placed from March 31 high at 145.67 while the upward-sloping trendline is plotted from March 30 low at 143.14.

Overlapping 20-period Exponential Moving Average (EMA) at 144.35 with the asset price indicates a sideways performance ahead.

Also, the Relative Strength Index (RSI) (14) is hovering in the 40.00-60.00 range, indicating a lackluster movement ahead.

Going forward, a break above April 03 high at 144.94 would drive the asset towards December 16 high at 146.72 followed by October 20 high around 147.30.

On the flip side, a break below March 30 low at 143.13 would drag the cross toward March 14 low at 142.53 and March 13 low at 141.57.

EUR/JPY hourly chart